Collection Notes from the Field

There is an old saying in the debt recovery profession that says, "a sale is a gift until the invoice is paid." It's the mandate of your A/R personnel and effective third party agent to turn those gifts into sales. From our perspective, not only are companies not paying their invoices on time, there is a growing trend toward paying them later and later. Thus, the need for good collection professionals both in-house and third party with effective skills is stronger than ever.

Below are a number of general tips and techniques to consider in your efforts to keep your customers current and to reduce your overall DSO (days sales outstanding):

Communicate immediately with a past-due customer via an invoice copy and computer generated message. Follow this up with a phone call.

Educate your customers. Make sure they know what your payment terms are and when you expect to be paid.

Establish consistency in customer contacts. This means that credit, customer service, and sales must tell the customer the same thing when it comes to payment terms.

Focus on largest accounts and get them to pay close to terms without letting the smaller accounts get completely out of hand.

Follow-up, follow-up, follow-up. Use frequent and persistent phone calls to follow up on late payments.

Have a well-documented sales agreement defining payment expectations.

Have invoices printed and mailed promptly. Some companies take a week or more to get invoices in the mail, and their customers start the clock running when the invoice hits their desks; not on the invoice date.

Identify recurring problems with a particular customer and get involved in resolving the problem.

If your A/R staff run into the same problem with different customers, review your own internal procedures to see if you can fix the problem.

Make sure that your invoices are correct the first time they are printed. With accurate data, your customer will not have to waste valuable time trying to correct the invoice.

Notify both the customer and the salesperson the minute an account is put on credit hold.

Case Receivable Management Inc. is dedicated to reducing the financial losses of our clients through the expeditious recovery of their aged receivables and bad debts. By way of negotiations, diplomacy, skill, and respect for the individual it is our mission to mitigate the potential financial losses of our clients while leaving their customers feeling that they have been treated professionally and with dignity.